Porter v. King County Medical Soc.

• Decision Date: 09 June 1936
• Docket Number: 25862.
• Citation: 58 P.2d 367,186 Wash. 410
• Parties: PORTER et al. v. KING COUNTY MEDICAL SOC. et al.
• Court: Washington Supreme Court

58 P.2d 367

186 Wash. 410

PORTER et al. v. KING COUNTY MEDICAL SOC. et al.

No. 25862.

Supreme Court of Washington

June 9, 1936

Department 2.

Appeal from Superior Court, King County; J. T. Ronald, Judge.

Action by Frank G. Porter and others against the King County Medical Society, a corporation, and others. From a judgment of dismissal, plaintiffs appeal.

Affirmed.

Charles H. Graves, of Seattle, for appellants.

Charles F. Riddell, of Seattle, for respondents.

MILLARD Chief Justice.

This action was instituted against the King County Medical Society, a corporation, the King County Medical Service Corporation, and certain officers, trustees, and members of the two corporations to recover damages alleged to have been sustained by the plaintiffs by reason of defendants having induced Doctors Ralph L. Sweet and Goff MacKinnon, members of the King County Medical Society, copartners, who were doing business as the Associated Physicians Clinic, to breach a contract existing between the plaintiffs and the copartnership.

The appeal is from the judgment of dismissal rendered upon the plaintiffs' refusal to plead further after a demurrer had been sustained to the complaint, upon the ground that the same failed to state facts sufficient to constitute a cause of action.

The allegations of the complaint are summarized as follows:

The King County Medical Society, a domestic corporation, is one of the constituent societies of the Washington State Medical Association, which in turn is one of the constituent societies of the American Medical Association. The King County Medical Service Corporation is a subsidiary of the King County Medical Society. The individual respondents physicians and surgeons of Seattle, are officers, trustees and members of either one or both the King County Medical Society and the King County Medical Service Corporation. The major portion of the practicing physicians and surgeons of King county are members of the King County Medical Society. That society, through its affiliation with the various county associations and state associations virtually dictates and controls the policies of the medical profession and its functions and practices in King county and dominates and controls all the accredited hospitals in King county. The King County Medical Society, through the power of its organization and activities, has created for its members a virtual monopoly of the medical profession and practice in King county, and has thereby established for its members an exorbitant schedule of fees and charges which are exacted from those requiring medical and hospital treatment. The society dominates and controls the individual business affairs and professional practice of its own members, and by threats of expulsion and other similar methods it infringes upon the right of its members to conduct their own affairs and profession as they see fit.

Within the last twelve years, individual physicians and a few groups of physicians, all active members of the King County Medical Society, organized, independently of the society, '* * * 'group medical service clinics' whereby groups of individuals and employees * * * enter into specific contracts with said clinics whereby upon payment of nominal monthly dues or fees, they are entitled to receive and do receive all necessary medical, surgical and hospital care and treatment in case of sickness or disability. * * *'

Among the clinics thus organized in King county was the Associated Physicians Clinic, organized about twelve years ago by Doctors Sweet and MacKinnon, members in good standing of the King County Medical Society. Until September 1, 1934, these two phhysicians were engaged in the group medical contract practice through contracts with many large business firms of Seattle, 'whereunder they furnished medical and surgical care and hospitalization to a large number of employees of such firms at the rate of one dollar per month per capita, and that virtually all of said contracts were secured for the said Associated Physicians Clinic by the plaintiff, Frank G. Porter, as particularly hereinafter set forth.'

Approximately six years ago, Doctors Sweet and MacKinnon, by a written contract for an unlimited term with Frank G. Porter, employed him 'as manager of their contract department to conduct generally the business end of the said clinic, particularly in securing new medical contracts for the same, to make collections of all monthly fees or dues thereunder, to furnish and maintain first-aid kits for all firms and companies under contract, to service and maintain all of said group contracts and to adjust all complaints or disagreements that might arise concerning the same; that in consideration for his said services, said agreement provided that the plaintiff, Frank G. Porter, should have and receive a sum equal to twenty-five per cent (25%) of all gross sums received upon said group service contracts; the balance thereof or seventy-five per cent (75%) of the gross going to said Associated Physicians Clinic.'

At all times since the organization of such independent clinics as the one organized by Doctors Sweet and MacKinnon, the individual respondents and the King County Medical Society and a majority of its members 'have been opposed to such group contract practice, in that it tended to injure the monopoly enjoyed by the society and its members in the medical profession and practice, and tended to deprive members of the society of much of their exorbitant and excessive fee practice.'

About two years ago the respondents entered upon a definite, concerted campaign to destroy such contract practice, and began to harass all of said clinics on the ground that such practice was unethical. The respondents demanded that Doctors Sweet and MacKinnon and other physicians engaged in such practice abandon same. In September, 1934, Doctors Sweet and MacKinnon and the other physicians engaged in such practice were forced to abandon the same as the direct result of a conspiracy by the respondents, 'all as particularly hereinafter set forth.'

In order to accomplish their purpose, the King County Medical Society and the other respondents proceeded as follows:

(1) The King County Medical Society organized its own group clinic on April 7, 1933, under the corporate name of the King County Medical Service Corporation. This clinic was in all respects identical in its plan and operation with that of the Associated Physicians Clinic and the other independent clinics.

(2) The respondents employed and took away from appellants their oldest and most experienced assistant, who was familiar with all of appellants' records and with all of the then existing contracts which appellant husband had secured for the Associated Physicians Clinic pursuant to his agreement with that clinic. This assistant, in the employ of the respondent King County Medical Service Corporation, with such knowledge of the business of the Associated Physicians Clinic, solicited the firms and companies which appellant Porter had placed under contract with the Associated Physicians Clinic and succeeded in inducing many of such contract holders to withdraw from their contracts and take new and similar contracts with the King County Medical Service Corporation.

(3) On August 7, 1933, the respondents procured the adoption by the King County Medical Society of an amendment to the by-laws which amendment is marked Exhibit A and attached to the complaint. The amendment provides that all charges against a member of the King County Medical Society shall be made in writing to the board of trustees. The charges shall be investigated by the board at its discretion. The accused shall be given the privilege of a hearing Before the board, and if the charges are found to be of sufficient moment, the charges shall, at the discretion of the board, be reported to the society with a recommendation for action. The by-law then provides:

'A member who has been found guilty of a criminal offense or of gross misconduct, either as a physician or as a citizen; or whose license to practice medicine in this state has been revoked or suspended by the State Board of Examiners; or who has committed any act which may be derogatory to the medical profession; or who shall refuse or neglect to obey the regulations of this society, or who knowingly gives false testimony as an ordinary or expert witness; or who has violated any of the provisions of these by-laws; or who shall violate the code of ethics of the American Medical Association as the same is now written, or as it may hereafter be changed; or who shall be guilty of any disloyal, seditious or treasonable utterance, writing or act against the United States, or who shall engage in contract practice unless the same shall previously have been authorized by the Board of Trustees of this Society, or who as physician or surgeon shall serve on the staff of or perform work for the patients of, or shall perform work in any institution or group or organization unless such services or work shall previously have been authorized by the Board of Trustees of this Society, shall be liable to censure, suspension or expulsion. Censure, suspension or expulsion shall require a two-thirds affirmative vote of the members present and voting at a regular meeting. Written notice of the charges preferred must be given to the accused, and to each member of the society, ten days in advance of such meeting. Opportunity for the accused to be heard in his own defense shall be given Before a vote of the Society is taken on his censure, suspension or expulsion.

'A member under suspension may be reinstated to active membership by a tow-thirds affirmative vote of members present and voting at a regular meeting.'

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